Déjà vu – Nicaragua heading toward another dynasty?

After decades of revolution, counterrevolution and democratic transition, Nicaragua has painfully regressed to authoritarianism. On Sunday, Daniel Ortega, the Sandinista National Liberation Front leader who ousted the Somoza dynastic dictatorship in 1979, ran for office for the seventh time and was reelected president for a third consecutive term. While Ortega has successfully revitalized Nicaragua’s economy, his reelection signals a turn toward a consolidated power structure that dismantles democracy and silences dissent in the country.

The good

Despite Ortega’s anti-capitalist rhetoric, his economic policies show pragmatic steps that have favored a business-friendly market economy. Last year, Ortega hired savvy Wall Street financial advising firm Lazard Group LLC. Its advice to the government was to be fully transparent with rating agencies and create more awareness of the country’s solid macroeconomic stability. Following these suggestions paid off, with Fitch and Standard & Poor’s rating Nicaragua at B+ and Moody giving the country a B2 rating.

The agencies emphasized Nicaragua’s solid growth of around 5.2 percent on average over the past five years, along with reasonable fiscal deficits and low government debt. The country also has attracted high inflows of foreign investment, and since it is a poor country, Nicaragua has access to concessional loans from multilateral financial institutions. In fact, although Nicaragua’s general poverty fell from 42 percent of the population to about 30 percent between 2009 and 2014, it remains the second poorest country in Latin America after Haiti.

Aligning with the now deceased Hugo Chavez also proved rewarding. Nicaragua greatly benefited from buying Venezuelan oil at discounted prices through Chávez’s Petrocaribe. Ortega would in turn allegedly re-sell part of the oil at market prices, making a significant profit. The oil revenue, aid from international financial institutions, disciplined macroeconomic policies, increased foreign direct investment and well-established consultation process with the private sector have boosted the country’s economic stability and empowered Ortega’s administration. The price, however, has been the erosion of Nicaragua’s young democracy.

The bad and the ugly

This will be Ortega’s third consecutive term as president and fourth administration overall. On the 30th anniversary of the Sandinista revolution in 2009, while serving his second non-consecutive term as president, Ortega announced his plans to amend the constitution to allow consecutive reelections. The Supreme Court, which is accused of obeying Ortega’s interests, lifted a constitutional ban on consecutive reelection and in 2011 Ortega became president for the third time. Like his previous victories, the 2011 election was marred with allegations of electoral fraud. Official observers like the European Union (EU) and the Organization of American States (OAS) had questioned the election and expressed their concern about the lack of neutrality and independence of Nicaragua’s election authority, the Consejo Supremo Electoral.

Ortega called the observers “shameless” and originally stated that he would deny them access to observe the election. However, last month, in an attempt to bring some legitimacy to the process, he retracted and allowed a mission from the OAS and a handful of former regional presidents who are friendly to his government to monitor the election.

Furthermore, this election has been widely criticized for the absence of true opposition. Just three months before the election, Nicaragua’s Supreme Court removed Ortega’s strongest opponent and 28 congressmen from the opposition. The remaining candidates in the race were relatively unknown and together wouldn’t garner a significant number of votes. The lack of candidates and ideological plurality left voters with little choice; thus, many refrained from voting as a form of protest.

Additionally, in August, Ortega named his wife Rosario Murillo as his running mate for vice president, disguising his nepotism under women’s rights and gender equality. Doing so allowed him to consolidate power and place her in the front of the line for the next election. It also unmasked their true motives of staying in power. Murillo has long been Ortega’s de facto chief of staff and the government’s spokesperson. Her high visibility and protagonist role in the government’s social programs has allowed her to enjoy a popularity rate of around 80 percent — higher than Ortega’s.

Ortega’s continuous closure of democratic spaces, elimination of true opposition, restrictions on media coverage, press intimidation, and lack of political transparency, coupled with his decision to name his wife vice president, has brought back flashbacks of the not so distant Somoza dynastic dictatorship. Several former Sandinista leaders who have left the party have expressed their concerns and believe that Ortega has betrayed the party’s socialist ideals of a better, more just world. Ortega’s own brother, who headed the armed forces for many years, has strongly criticized Ortega’s authoritarian turn. Resembling the Somozas’ rule, Ortega’s systemic control of all branches of government and institutions has destroyed democracy’s fundamental role of checks and balances in the country.

Twenty-six former Latin American presidents signed a declaration of the Democratic Initiative of Spain and the Americas (IDEA) expressing their alarm over the serious threats to the democratic and constitutional order of Nicaragua and Venezuela. They questioned the real authenticity of the Nicaraguan elections and asked the OAS member states, the EU and the international community to be on alert. In addition, the U.S. House of Representatives passed the Nicaragua Investment Conditionality Act in September, directing the U.S. government “to oppose loans for Nicaragua from international financial institutions” — which have been critical to Nicaragua’s economic progress — until its government takes effective steps to promote democracy, strengthen the rule of law and hold fair and free elections, among other efforts.

The world is watching how Ortega’s success with Nicaragua’s economy has come at the painful cost of its democracy. Five years from now, it should come as no surprise that Murillo will be the next president of the Ortega dynasty.

Erika de la Garza is the program director of the Latin America Initiative at the Baker Institute. Her chief areas of interest include U.S.-Latin America relations; emerging leadership; coalition building between public, private and civil society actors; and trade and business development in Latin America.